Conceptual Framework

Conceptual Framework helps the International Accounting Standards Board to develop criterion that are depend on consistent concepts. It helps prepares to

I believe nurses learn both my observation and experience. As a preceptor, I do not throw a nurse to the sharks. If the nurse has never done something before, I let the new nurse observe me and explain each step as I do it. The next time a similar situation appears, I ask the new nurse to do it his/herself. If I see a variation in how I did the same task and it does not harm the patient; I feel the nurse has established their own way of doing things and is feeling more comfortable in that particular task. If the situation presents itself, I ask the new nurse to teach another nurse how to perform the task. I also explain to my nurses that the textbook shows you the perfect world, but in real life we never get quite that scenario. I explain we have to alter our actions to perform interventions and do what is best for the patient. An example, I often share, is that in an ideal world, when inserting a tracheostomy tube, we have a prepped sterile field. However, there are times the airway is needed in such a hurry; we have to think about providing an airway first and dealing with the infection later.

The objective of financial statements is to provide information about the financial strength, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions ("The Framework for the Preparation and Presentation of Financial Statements").

The financial statements need to meet two qualitative characteristics, namely, relevance and reliability. The statements must be relevant to the decision making process of the users and make an impact on the economic decisions by making comparison with the past, present or future occurrences. For the information to be useful, it must be reliable too. This means the statements should be free from material errors and also contain all the necessary explanations and

There is dominant need to investigate the theories related to accounting in reality. A theory according to Banerjee (2010), is a validated proposition which has been tested for its conformity with reality. Consequently, it can be considered that; theory is a system which includes both variables and concepts. Where for relationship among concepts, proposition are used and for relationship among variables hypothesis are developed (Bacharach, 1989).

This essay will begin to look at the main financial statements used by decision makers in businesses today. This essay will go into detail about the income statement and statement of financial position and whether these two statements provide decision makers with their financial information adequately. This essay will also include the various advantages and disadvantages of each financial statement as well as describing whom the decision makers are and why financial statements are important to them. A conclusion will be present at the end of this essay to demonstrate an overall view of whether financial statements are beneficial to decision makers.

Financial statements provide an overview of a business' financial condition in both short and long term. All the relevant financial information of a business enterprise presented in a structured manner and in a form easy to understand, is called the financial statements. Therefore these financial statements are very useful for the stake holder, as they obtain all insight information.

The most common user of general purpose financial reporting is present and potential investors, lenders, and creditors. So the objective of financial reporting is to provide relevant financial information that is useful for users in making decision about buying, selling and providing loans or setting loans. The user needs information about resources of the company as well as also wants to know how efficiently management of the company performs their duties to use resources of the entity. The IFRS framework says that financial reports cannot provide all the information to users that users may need to make decisions. They must need relevant information from other source.

Because financial statements are accounting reports, one of their purposes is to communicate financial information about a business entity to investors and other interested parties. Financial statements provide information on the business' financial position or status as well as financial changes during a period of time. They communicate to investors information about financial decisions that have been made (Woelfel, n.d.).

Financial statements are key aspects of business operations. In fact, it is the financial statement that provides management with the information needed to make sound business decisions. Other stakeholders, like investors and creditors, use financial statements to make decisions about whether or not to invest in, loan money to, or do business with a company (Jesswein, 2013). The importance of a financial statement is dictated by the need for certain information, i.e., the overall health of a business, the creditworthiness of a business, and/or the ability of a business to make money (Jesswein, 2013). Financial statements are comprised of income statements, balance sheets, and cash flow statements (Melicher & Norton, 2014).

Financial information is playing a crucial role in a business to help the owner make correct decision, this is because as the financial statement, it is ‘a collection of reports about an organization 's financial results, financial condition, and cash flows’ (AccountingTools, ND). Decision making is one of the most vital factors that will affect business to move forward, if the financial information inaccurate, the decision will be inappropriate, such as price setting, and then the business will loss the chance to maximize their profit what is the main objective in a business. Therefore, having accurate financial information is the heart of the business management it can help with decision making process in many ways.

A company’s financial statements contain the true fiscal pulse of the company. If ever there is a need to check the health of a company to see how strong or weak it is fiscally, the financial statements hold the answers. These statements allow shareholders, lenders, and investors the opportunity to assess a number of things about the company such as how it can grow it’s customer base, where it falls short at any particular time, and even how well the company is doing amongst it’s peers. Financial statements also provide key information regarding a company’s accounting principles. The purpose of this paper is to identify and assess each of the documents that make up a firm’s financial statements, which are, the income statement, the balance sheet, and the statement of cash flows.

Income statements are an important element crucial to the financial records of any company. Any profit making organization is expected to have records containing its income statements. Income statements are normally recorded annually at the end of a specific financial period. The major purpose of an income statement is to show stakeholders of the company such as managers and investors whether the company made a profits or losses in the period being reported. This performance analysis provided by the income statements can help managers come up with strategies to improve on profitability and growth of the company (Alexander and Jorissen 2005).

The answer to the question about the nature and the function of the company financial report has been attempted to be answered over the years. According to Alexander (2011), the conceptual framework for financial reporting (Conceptual framework) is defined as a scheme of systematic thinking which provide not only the definition but also the solution to accounting issues. Meanwhile, it is seen as a tool of help standard setter (IASB) to develop and revise reporting standards. It is a reference to prevent standard setter from confusion like fire fighting while they face accounting questions, for example if some item can be defined as asset. In fact, the status of the conceptual framework is higher than the specific standard and more precisely, it is seen as a guidance for

Financial statements provide a view on the company’s financial changes within a specific reporting period and confirm its overall state. They give information such that they provide shareholders with a picture of how well the company is doing. These enable them to evaluate a stock’s worth and aid them in making stock-related decisions such as buying/selling/retaining which provide them further on the status of their return on investment. Additionally, they reflect how the shareholders’ money are invested, its outcome and effect to the company.